Costco Positioned for Possible Growth: Partnerships, Programs, and Higher Membership Rates



Costco Positioned for Possible Growth: Partnerships, Programs, and Higher Membership Rates



ISSAQUAH, WA  With partnerships, expansions in offerings, and rumors of a hike in membership prices, Costco looks to be positioning itself for further growth in the market.

Michael Lasser, UBS Equity Research Analyst UBS Equity Research Analyst Michael Lasser wrote after a recent interview with Costco Executives that the company has expanded products that drive shopper traffic, including its assortment of fresh items and, in some locations, on-site bread baking.

Now Lasser and Fortune both note that a boost in the cost of membership could be on the horizon, which last year brought the company $2.5 billion in revenue.

A hike in membership prices, Fortune notes, is something that usually only happens every five years, the last being in 2011.

The boost would be the latest in a series of strategic moves for Costco. In addition to expanding its fresh offerings, the retailer was also named one of the biggest in organics last summer and has recently launched a program to widen its net for organic supply.

As we previously reported, Costco recently announced big moves to look for partners with which it could finance the purchase of organic land, and position itself for more access to organic produce.

“The conditions are in place for Costco to bump up its membership fee early next year,” Lasser wrote in his report, which included that the current membership rates, ranging from $55 and $110 depending on the kind of membership, could go to $60 and $120 some time in early 2017.

Costco’s stock recently saw a 1.7% boost after increasing its quarterly dividend by 5 cents, from 40 cents to 45 cents, and continues to remain steadily in the green.

With a trajectory aimed towards boosting its reach in fresh, both organic and conventional, it will be interesting to see what the chain’s strategy delivers next.

Costco